If you are a full-time traveler, a hot topic is always ….. “how do I make money and travel?” An even more popular question is ….. “how can I make a passive income?” Passive income is an outstanding way to make an income without physically performing a task over and over again. Below I will show you how you can use your home to fund your travels!
As full-time travelers, we are always looking for ways that will provide us a passive income. If you still own a home, condo, townhome, etc. why not turn it into a vacation rental property? Most of you have heard of, or even stayed in an Airbnb. Aren’t they absolutely wonderful? Have you ever thought about owning one? It is not as hard as one may think and can provide you with a substantial passive income once it is up and running.
In this blog, I am not going to blow up your brain, but challenge your typical thought process about owning a rental property. The property may allow you to take something you already own and turn it into a cash machine.
Here are the basic steps to determine if you have a cash cow:
Location, Location, Location
- Visit Airbnb, VRBO, etc and choose your city.
- Use the filters to search the number of bedrooms, baths, type of housing, etc. that are listed.
- Review the rates for similar properties. I would also suggest that you review the calendar to get an idea of the occupancy rate. For example, how many days a month throughout each month are these properties booked? Be sure to look at different months throughout the year. Every area has a higher booking season. If you are located in an area that has regular sporting events, near major universities and medical centers, etc, even better. You can charge more during popular events.
- Keep an open mind. Not every successful Airbnb is on the beach or in the mountains.
Check Your Local City Regulations and/or HOA
- As vacation rentals have become increasingly popular, there are regulations that may prevent you from offering short term rentals in your area. You need to know this before you spend any more time or money.
- If you live in an HOA, read your HOA regulations paperwork. Some HOA’s restrict short term rentals or may have limits. For example, short term rentals may need to be a minimum of 30 days. Therefore, you could not rent for several days or a week at a time.
- As a short term rental property, you will be required to charge your guests and pay tourist taxes. The guest pays this tax, but you will need to register with and remit those taxes to your local tax department. We use Mylodgetaxes to report our revenue each month and Mylodge remits the taxes and any necessary forms directly to the appropriate agency.
If you have determined that you have a viable vacation rental, what do you do now? If you already have a furnished property that you live in, you need to minimize! Clean, simple and uncluttered is the name of the game.
- Remove all your personal and valuable items.
- Get rid of the clutter.
- Purchase new and/or replace furniture or items that are not in good shape.
- Purchase new bedding, sheets, towels, etc.
- Stage the property. Look at other listings on Airbnb and VRBO to see how they are decorated. You may want to add some comfort items, such as a small desk, but only if you need to fill an empty space.
There are options when listing the property for rent:
Do it all yourself
- Take photos.
- Write the description.
- Open and set up your accounts with Airbnb, VRBO, etc.
- Set your rates.
- Take reservations.
- You are the sole communicator for your guests before and during their stay.
Hire it all out
- Use our link to Evolve Vacation Network and you will get a $250 credit once you’ve been active for 60 days.
- Evolve will take the pictures.
- The description is written by Evolve and approved by you as the owner.
- Rates will initially be set by Evolve based on the criteria of the property. You have the final say over the rates.
- Fees and marketing costs are paid by Evolve. Your property is visible on Airbnb, VRBO and more.
- Guests contact Evolve directly to reserve your property.
- The reservation deposits and payments are processed by Evolve.
- Evolve will deposit your funds directly into your bank account.
Please note that if you use Evolve, you do not lose control. You as the owner, approve the pictures, description and can adjust the rates as needed whenever you desire. You will also need to have a cleaning company after guests depart. Evolve can refer you to someone in your area or you can find your own cleaners.
We managed our own vacation rentals for years. Evolve has allowed us to continue our business, keep our home and provide us with a decent income while we travel.
How Much Did We Make?
We marketed our home with Evolve in mid-March 2018. We stayed in the home for the month of December. The financials below show April 1, 2018, through April 30, 2019.
|Fees (MGMT and Payment)||$2,855.29|
|Expenses (Mortgage, Utilities, etc.||$36,440.05|
In addition, we opted to set our rates a bit lower in the beginning to encourage bookings and gain reviews. We received thirteen bookings in the first two weeks. Three incremental rate increases were implemented over the first six months. Our average nightly rate has increased $40 to $50 since our listing went live. The rate increase will have a positive impact on our financials for 2019.
Did we make the right decision?
- For us, yes!
- We have a passive income stream.
- We have a home base if we want to get off the road for a week or two.
Our only regret is that we did not do this sooner!
Be sure to follow us at Trippinbrehenys for all the ways we make money while traveling.
We would love to hear your feedback and questions. If you already own a vacation rental, please comment with your tips and tricks.
Looking to set up a vacation rental? Leave your questions below in the comment section.